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European Commission and IFAD commit to increased investment in agriculture for rural poverty eradication

Brussels and Rome, 9 March 2007— The European Commission (EC) and the International Fund for Agricultural Development (IFAD) have committed to stepping up investment in agriculture as a means of eradicating rural poverty in developing countries around the world.

These commitments occur at a time when major donors, international institutions, and the private sector are focusing on agriculture and its role in meeting the Millennium Development Goals (MDGs). Clear signs of this renewed interest are the recent commitment by African leaders to invest 10 per cent of their countries’ budgets in this sector, the choice of agriculture as the theme of the 2008 World Bank World Development Report and substantial increases in EC development assistance directed to rural areas.

Today the President of IFAD, Lennart Båge, met in Brussels with senior officials from Europe Aid Co-operation Office and the Directorate General for Development of the European Commission.

Båge reiterated that investment in agriculture is the key to meeting the MDGs given that 75 per cent of the world's poorest people, living on less than a dollar a day, live in rural areas and depend on agriculture and related activities for their livelihoods.

At its annual Governing Council meeting in February this year, Båge stated that following the successful completion of the IFAD’s 7th Replenishment of its resources, the organisation will "plan a Programme of work of US$2 billion for about 100 programmes and projects—with a total investment cost of about US$4 billion".

"On the basis of our preliminary assessment I can already anticipate" that provisional allocations for rural development, territorial planning, agriculture and food security under the 10th European Development Fund (EDF) exceed 13% of the EDF total country envelopes, reaching some Euro 1.5 billion therefore doubling the 9th EDF allocation,” Bernard Petit, Deputy Director General of the Directorate General for Development of the European Commission, said.

Petit added that "the EC will continue to provide substantial development assistance to agriculture, food security and rural development also through the new EU Development Cooperation Instrument. Priority areas of support include food security (including information systems, innovation, policy development), agricultural research, sector governance, Sanitary and Phytosanitary Measures, livestock disease control, natural resource management and risk reduction".

"The new 2007-2013 EC Food Security Thematic Programme (FSTP) is already a concrete sign of the EC's steady commitment towards achieving MDG1 on hunger particularly in Sub-Saharan Africa. With an allocation of Euro 925 million in the coming four years the FSTP intends to improve the food security situation of the poorest and the most vulnerable through a set of better coordinated and increasingly coherent actions," said Koos Richelle, Director General of the EuropeAid Co-operation Office of the EC.

Båge underscored the importance of expanding collaboration with the other two Rome-based UN agencies the Food and Agriculture Organization and the World Food Programme. Both Petit and Richelle welcomed the ongoing UN reform exercise as an opportunity to bring coherence to the UN system.

The outcome of the meetings between the President of IFAD and senior officials of the EC will serve as a common platform from which the two organizations can identify and develop joint programs and investment in the sector of agriculture, rural development and food security that have the highest impact on rural poverty reduction. Proposed areas of focus will include rural finance and remittances, natural resource management including land degradation and desertification, livestock management, pro-poor market access, and agricultural research.

This platform is the latest in a series of collaborations between the EC and IFAD. Both institutions are in the process of finalising negotiations to provide joint financial support to the Consultative Group on International Agricultural Research (CGIAR) centres. This year an EC contribution of approximately Euro 45 million to the CGIAR global network is being considered and is likely to be channelled through IFAD.

Over the past 29 years IFAD has committed approximately USD 200 million for over 105 CGIAR-led research initiatives. Evaluation studies provide strong evidence that these investments can be among the most effective contributors to rural poverty reduction impacting small-scale agriculture throughout the developing world. Since 2001 the European Commission has supported CGIAR initiatives to the tune of Euro 121 million.

In 2005 EC contributed Euro 4 million to IFAD to fund the “Promoting Innovative Migrant Remittances Systems” programme to alleviate rural poverty through the development of innovative remittance services.

Furthermore, in 2006 the EC provided a Euro 1.5 million grant to the International Land Coalition (ILC) - the global land alliance housed at IFAD for a project focusing on secure access to land and other natural resources.

The 2nd European Forum on rural development organised in June this year by the EU German Presidency and the European Commission will take up agricultural-related issues. IFAD will contribute to these discussions through the Global Donor Platform on Rural Development to which IFAD and EC are both members.

IFAD as an International Financial Institution and a specialized United Nations Agency is dedicated to eradicating rural poverty in developing countries.

The EC promotes rural development, food security, and sustainable development in developing countries in order to contribute to poverty reduction.